"Incentives, Efficiency, and Government Provision of Public Services"
with Sherwin Rosen, in Annual World Bank Conference on Development Economics
1997, Boris Pleskovic and Joseph E. Stiglitz, editors. Washington,
D.C.: The World Bank.

Please e-mail me at
weinberg.27_at_osu.edu for a free copy of any paper.

HIGHER CRIME RATE
LINKED TO LOW WAGES AND UNEMPLOYMENT, STUDY FINDS

"Clearly,
the long-term trend in wages was the dominant factor on crime during
this period," Weinberg said.

COLUMBUS, Ohio - A new study provides
some of the best evidence to date that low wages and unemployment make
less-educated men more likely to turn to crime.

Researchers examined national crime
rates between 1979 and 1997 and found much of the increase in crime during that
period can be explained by falling wages and rising unemployment among men
without college educations.

While politicians have focused on
crime-fighting initiatives as central to controlling crime, this study shows
that the impact of labor markets should not be overlooked, said Bruce
Weinberg, co-author of the study and associate professor of economics
at Ohio State University.

"Public officials can put more cops
on the beat, pass tougher sentencing laws, and take other steps to reduce crime,
but there are limits to how much these can do," he said. "We found
that a bad labor market has a profound impact on the crime rates."

Weinberg conducted the study with Eric
Gould of Hebrew University and David
Mustard of the University of Georgia. Their
results appear in the current issue of The
Review of Economics and Statistics.

From 1979 to 1997, federal statistics
show the inflation-adjusted wages of men without a college education fell by 20
percent. Despite declines after 1993, the property and violent crime rates
(adjusted for changes in the country's demographics) increased by 21 percent and
35 percent respectively during that period.

Weinberg said the strongest finding in this new study is a link between falling
wages and property crimes such as burglary. However, the study also found a link
between wages and some violent crimes - such as assault and robbery - in which
money is often a motive.

The weakest relationship occurred with
murder and rape - two crimes in which monetary gain is not usually a motive.

"The fact that murder and rape
didn't have much of a connection with wages and unemployment provides good
evidence that many criminals are motivated by poor economic conditions to turn
to crime," Weinberg said.

The theory behind why crime increases in
the wake of falling wages is simple, he said. "A decline in wages increases
the relative payoff of criminal activity. It seems obvious that economic
conditions should have an impact on crime, but few studies have systematically
studied the issue."

National crime rates rose from 1979 to
1992, when wages for less skilled men were falling. Crime declined from 1993 to
1997. This decline in crime corresponded to a leveling off and slight increase
in the wages of unskilled workers across the nation in that period, Weinberg
said.

Weinberg and his colleagues did several
analyses to examine the connection between wages, unemployment and crime between
1979 and 1997 for men without college educations. In one analysis, they looked
at crime rates in 705 counties across the country - all counties with
populations greater than 25,000 - and compared them with state wages and
unemployment rates. The second analysis focused on statistics from 198
metropolitan areas as defined by the U.S. Census. The researchers took into
account factors such as arrest rates and number of police that may have also
influenced crime rates.

In the first analysis, the researchers
calculated that the 20 percent fall in the wages of non-college-educated men
over the entire period can account for a 10.8 percent increase in property crime
and a 21.6 percent increase in violent crime. "Wage declines are
responsible for more than half of the long term increase in both property and
violent crime," Weinberg said.

Overall, wages had a larger effect on
crime than did the unemployment rate, according to Weinberg. That's because the
unemployment rate is cyclical and there is no strong long-term trend. Wages,
however, fell steadily during most of the period studied.

"Clearly, the long-term trend in
wages was the dominant factor on crime during this period," he said.

In a third analysis, the researchers
examined data from the 1979 National
Longitudinal Survey of Youth to see if the criminal behavior of the young
men who participated in the survey could be linked to economic conditions where
they lived. This survey asked participants if they had taken part in crimes such
as shoplifting and robbery in the previous year.

As expected, economic conditions had no
effect on the criminal activity for the more highly educated workers in the
sample.

However, among less educated men, lower
wages and higher unemployment rates in the states where they lived made it more
likely that they had participated in crimes. This was true even after the
researchers took into account factors such as cognitive ability and family
background.

"Low-skilled workers are clearly
the most affected by the changes in labor opportunities, and these results
remain after controlling for a wealth of personal and family
characteristics," he said.

In child discipline, as in pretty much
everything else, the rich have more options than the poor. If you're rich (or
even modestly middle-class), you can take away the Game Boy, confiscate the car
keys, or turn off the Instant Messenger. But for families with no Game Boys, no
cars, and no Internet access, that whole range of punishments is unavailable.

If you're rich or middle-class, you can
cut your kid's allowance; if you're poor, your kid might need the allowance to
live on. When a middle-class kid loses his allowance, he makes do with fewer CDs
or video games. When a poor kid loses his allowance, he makes do with fewer
school lunches. Depriving a kid of luxuries can be an effective punishment;
depriving a kid of necessities can be a form of child abuse.

Spanking, by contrast, is an
equal-opportunity punishment; it works equally well whether you're rich or poor.
So simple economics suggests that the very poor, with fewer alternatives
available, should spank their kids more—and they do. Professor Bruce Weinberg
of Ohio State University has studied this. He found that if you're a kid in a
$6,000-a-year household, you probably get spanked every six weeks or so. If your
parents' annual income goes up to $17,000, you'll get spanked about once every
four months. As income rises above about $17,000, spanking falls off more
slowly; $40,000 and $120,000 households are not much different from $17,000
households. That makes sense; in today's America, you don't have to be very
wealthy before your kid has a Game Boy, so even a $20,000 household has good
non-spanking alternatives.

For allowance withdrawal, the numbers go
exactly the opposite way, Weinberg found. If you're a kid in a typical
$6,000-a-year family, you'll almost never lose your allowance, but in a family
that makes $17,000 or more, you'll lose your allowance four or five times a
year.

It might seem like a stretch to explain
spanking with economics, but what else could account for these patterns? Well,
there's always culture. The very poor are disproportionately black, and blacks
physically discipline their children more than whites do. But according to
Weinberg, the effect of income persists even after you've controlled for race
and other cultural variables.

Anyway, black parents punish their
children more than white parents in all ways. If you're black and you
misbehave, you're both more likely to get spanked and more likely to
lose your allowance than your white neighbor, who in turn is both more likely to
get spanked and more likely to lose his allowance than the Hispanic kid
down the street. So on average, poor people spank more and withdraw allowances
less, whereas black people spank more and withdraw allowances more. The
income pattern fails to match the racial pattern, so the income pattern can't be
fully explained by race.

It is true, though, that racial
differences are more pronounced for spanking than for allowance denial: In both
cases blacks punish the most, then whites, then Hispanics, but the gaps between
racial groups are much bigger for corporal than for financial punishment.

There are other cultural factors: Boys
are punished more than girls, with substantially more spankings and a bit more
in the way of allowance withdrawals. Single mothers spank a little less, and
withdraw allowances quite a bit less, than other parents. Older and
better-educated parents are a bit less likely to spank and a bit more likely to
withdraw allowances. Bigger families spank less and withdraw allowances more.
But Weinberg's study finds that the poor spank more even after you've
accounted for all of these effects. The question is why.

Here's one good alternative to the
economic explanation: University of New Hampshire sociologist Murray Straus has
published multiple studies concluding that children who are spanked are less
successful as adults. If the link is causal—that is, if being spanked actually
lowers your earnings potential—and if spanking runs in families, then we have
an alternative explanation for Weinberg's numbers: Low-income parents are more
likely to spank their children because low-income parents are more likely to
have been spanked themselves. Or maybe it's as simple as this: Poverty breeds
frustration, and frustrated parents lash out at their kids. Does any reader have
a better story?

Bruce Weinberg believes computers
have helped to increase the presence of women in the work force.

New
jobs for women due to more computer use

By Jeff Grabmeier

Many of the women who have joined the
American work force since the 1970s have the computer revolution to thank,
according to a new study.

A researcher at Ohio State estimated
that increased computer use in the workplace explains about 55 percent of the
increase in the demand for women workers since the mid-1970s. Many of the new
jobs are in blue-collar industries.

"Computers have opened up a lot of
job opportunities for women that weren't available before," said Bruce
Weinberg, author of the study and assistant professor of economics.

"Many blue-collar jobs that once
emphasized strength and physical skill are now done by computers, and can be
done easily by women with the right skills."

The study is published in the current
issue of the journal Industrial and Labor Relations Review.

For his study, Weinberg analyzed data
from the federal Current Population Surveys conducted between 1970 and 1994.

He looked at changes in the number of
employees -- both men and women -- who used computers in various industries and
occupations. He also used the data to estimate the change in demand for women
workers over the time period.

He found that the percentage of
Americans' total work hours that were contributed by women grew from 35 percent
in 1975 to 40 percent in 1984 and 42 percent in 1993. During that time, use of
computers also jumped, from 26 percent in 1984 to 49 percent in 1993.

There's a definite connection between
this growth in number of women employed and growth of computer use in the
workplace, Weinberg said. In fact, the analysis showed women were more likely
than men to use computers on the job -- 45 percent more likely in 1984 and 33
percent more likely in 1993.

"It's significant that the
industries and occupations in which computer use increased the most also
experienced the greatest increase in the employment of women," Weinberg
said.

As more women joined the work force and
became trained on computers, their wages increased relative to men's, the study
showed. After taking into account education and other factors, Weinberg found
that women's wages increased by 5.7 percent between 1975 and 1984 and by 8.7
percent between 1984 and 1993. Much of this increase in wages relative to men
probably resulted from the fact that women workers were learning new computer
skills, he said.

Weinberg said the growth in computer use
most clearly benefited women in what he called"high blue-collar" jobs,
such as craft workers, machinists and technicians.

"A lot of these jobs used to be
dirty, physically demanding jobs that were done in factories or shops with poor
working conditions -- jobs that only attracted men," he said."Computer
use changed all that. Now many of these jobs can be done with the help of
computers in relatively clean, pleasant working conditions."

One example is in the pulp, paperboard
and converting industries. According to the federal Bureau of Labor Statistics,
workers in highly automated mills of today remain in an air-conditioned control
room. They no longer have to walk alongside a paper machine in hot and wet
conditions, or be exposed to a dark, moist and toxic environment in one of the
older bleach plants.

While the BLS expects employment to drop
overall in this industry, the number of women is expected to increase, in part
because jobs which were once physically demanding will be made easier.

In fact, increasing computer use also
benefits women who don't use computers on the job, according to Weinberg. As
computerization improves working conditions at factories and production
facilities, women are more likely to fill other jobs there that don't involve
using a PC, simply because the conditions are more appealing.

While growing computer use most
benefited women in high blue-collar jobs, Weinberg found women in low
blue-collar jobs and white-collar jobs also benefited, but to a lesser extent.

Weinberg investigated other explanations
for the data, including the possibility that it was actually the increase in
women workers that led to jumps in computer use, and not the other way around.
But these alternative explanations don't fit the data, he said.

"The best estimate is that a little
more than half of the increase in demand for women workers is the result of
growing computer use," he said.

COLUMBUS
,
Ohio
– The neighborhood people live in can affect how easy it is for them to find
a job, according to a new study..

Research found that the number of hours people worked increased when they
lived in neighborhoods with higher employment rates.

Past studies have suggested a connection between neighborhood and
employment, explained Bruce Weinberg, associate professor of economics at
Ohio
State
University
. But this new study confirms that, at least to some extent, the effect is real.

Even when Weinberg and his colleagues controlled for a variety of other
neighborhood characteristics such as average income and education level, the
result remained: people are more likely to land a job if their neighbors already
have one.

The finding, published in a recent issue of the Journal
of Labor Economics, underscores the value of a government strategy for
boosting employment known as scattered site public housing.

Since the 1980s, government agencies have tried to raise employment in
cities by breaking up concentrated areas of public housing and relocating
families to better neighborhoods.

“The end result is that scattered public housing can help reduce
unemployment,” said Bruce Weinberg, associate professor of economics at
Ohio
State
.

He and his coauthors used data from the National Longitudinal Survey,
which has followed the lives of some 12,000 people since 1979.

The survey, which grew out of an
Ohio
State
research project from the 1970s, tracks participants’ addresses, education,
and employment. The men and women were between the ages of 14-22 years when they
were first surveyed in 1979, so in many cases the survey has been able to record
people’s work history starting with their first job.

For the new study, the researchers used geographic information system
(GIS) software to examine how people’s choice of neighborhood correlated with
employment. They looked not only at whether participants were employed, but also
how many hours they worked -- for instance, whether they worked full-time or
part-time.

They used data from more than 2,300 men who participated in the survey,
for whom they could compile complete addresses as well as neighborhood and
employment statistics.

They found that moving from a neighborhood with a lower employment rate
to a neighborhood with a higher employment rate would, on average, raise the
number of hours a person worked per year by 117 hours -- nearly three 40-hour
weeks.This represented a 6.2
percent increase over the survey average, and is approximately equal to the
increase associated with an additional year of education, Weinberg said.

Of course, people can’t arbitrarily choose to live in a neighborhood
that’s beyond their means in the hopes of getting a better job. But people who
can afford to move, or who move with the aid of government assistance, can stand
to benefit, the study suggests.

Weinberg explained the theory behind scattered site public housing.

“The idea is that your employed neighbors know where the jobs are and
can help you find a job -- it makes sense,” he said. Moving a family from a
housing project -- where most of their neighbors are unemployed -- to a new
neighborhood where most of their neighbors are employed is one way to increase a
family’s odds of finding a job.

But breaking up public housing is an expensive and complicated strategy,
since it involves tearing down high-rise apartments, building new homes, and
relocating people.

That’s why Weinberg thinks studies such as his are necessary -- to help
determine whether social programs such as scattered site public housing can
offer the expected benefit. Employment depends on many interacting factors,
however, and isolating the effects of a single factor such as choice of
neighborhood is difficult.

Study coauthor Patricia Reagan, a professor of economics at
Ohio
State
and a scientist with the university’s Center for Human Resource Research,
said that recent advances in GIS techniques allowed the researchers to begin to
tease out the complicated ways that neighborhoods influence a person’s
employment.

“The National Longitudinal Survey is already one of the most widely
used surveys in the social sciences,” Reagan said. “ “When the director of
the center, Professor Randall Olsen, and I realized that we had longitudinal
data on participants addresses and could exploit recent advances in GIS software
to determine latitude and longitude of residence as well as census tract of
residence, we realized that we could expand the scope of the survey by merging
it with information on the local environment in which respondents have lived,”
she said.

Along with the link between neighborhood employment levels and the
individual’s ability to find a job, the study also examined a common belief --
that people who live close to jobs have an easier time finding a job.

The finding: The change in job access by moving from one neighborhood to
another would, on average, lead a person to work 86 hours more per year. So the
positive effect of moving closer to work was about two-thirds as strong as the
effect of moving to a neighborhood with higher employment rates.

Reagan is already using the same GIS techniques to probe how people’s
choice of neighborhood affects other outcomes, including whether children who
live near a hospital are more likely to get regular annual check-ups and whether
mothers living in neighborhoods with higher poverty rates are more likely to
have adverse birth outcomes such as preterm delivery.

Study authors included Jeffrey Yanknow, assistant professor of economics
at
Furman
University
in
Greenville
,
South Carolina
.

One hundred years ago Albert Einstein published four of his most important
papers. Only two years later, Pablo Picasso painted some of his most important
works, including “Les Desmoiselles d’Avignon.” Both completed these works
when they were twenty-six years old.

Prior to their innovations, significant contributions in both fields had been
made by older individuals. The Impressionists who preceded Picasso had
accomplished their most important work later in their lives. In physics,
fundamental discoveries about x-rays, radioactivity, and atomic structure were
made in the years before (and after) Einstein’s work, often by older
researchers.

Why did these men innovate earlier in their careers than others in the same
fields?

To answer this question, one must look at the styles of these innovators and
their environments. The Impressionists began painting at a time when French art
was dominated by a rigid academic system that had little enthusiasm for this new
style. Prior to Einstein, young physicists were often told that there were few
fundamental discoveries left to be made. In both cases, the first generations
entered fields with established paradigms and little apparent need for their
innovations.

The contributions of the earlier innovators were driven by personal interests.
Their work evolved through experimentation and improved over time as they
developed their abilities. Claude Monet and the Impressionists were motivated by
aesthetic goals – painting the world around them as it appeared to the eye.
They often painted in series to explore how to achieve their goals, and their
mid- and late-career works are their most highly regarded. In many cases, the
great discoveries of the physicists were unexpected. The nucleus of the atom was
discovered by Ernest Rutherford during an experiment from which he expected
markedly different results. It was part of a series of related experiments that
would produce important findings into his fifties.

The work of these groups prepared the ground for other innovations, and young
practitioners responded. Freed from the academic system and in an environment
that now prized innovative art, the next group of French artists purposefully
set about innovating. They focused less on aesthetic criteria than the
Impressionists did and more on concepts. Thus, Georges Seurat’s work built on
scientific research on visual perception. Picasso developed Cubism as a response
to linear perspective and shading. Both did their most important work quite
early in their careers.

In physics, experimental challenges to the prevailing paradigm demanded new
explanations, and Einstein and other theorists responded. They were able to make
fundamental contributions at early ages because of the puzzles that had been set
out by the experimenters that preceded them.

The patterns that emerge among these artists and physicists hold true for
creativity more generally. While young conceptual wizards are now driving the
Web revolution, it is noteworthy that the Web was developed by Tim Berners-Lee
through a series of experimental projects. He was in his forties when he
completed the one that became the Web we know today.